According to an analysis of the Australian energy market, some of Australia’s coal-fired power plants could be financially infeasible by 2025, and at least one could be forced to close early. There is.
A joint report by the Institute for Energy Economics and Financial Analysis shows appreciation and advisory firm Green Energy Markets trying to quantify increasing pressure on coal-fired power plants as cheaper and more flexible renewable energy floods hit the grid. I think there is.
The most vulnerable power plant is in New South Wales, and there was concern that abrupt closures would lead to a shortage of electricity available if the transition was not properly managed.
“The market faces a new wave of supply that is much larger than government officials and market analysts predicted or thought just two years ago,” said Tristan Edith, director of the green energy market. I have. “
“The additional supply from 2018 to 2025 represents more than one-third of the total demand in the national electricity market and more than eight times the annual power generation of the Liddell coal-fired power plant in New South Wales. I will.
“I need to give something.”
Between 2018 and 2025, the new wind and solar power plants will add an additional supply of 70,000 gigawatt hours, according to the report. This is more than the total annual electricity consumption of New South Wales.
Price close to zero
Johanna Bowyer, co-author of IEEFA, said the extra energy would lead to a disruption of power from many of the existing fossil fuel generators.
“Wind and solar have no fuel costs and they will be kicked out because they usually bid on the market at prices close to zero,” she said.
“Compared to 2018 levels, gas-fired power plant output is projected to decline by 78% and coal output by 28% by 2025.”
The report said that the additional supply of renewable energy could not only make electricity prices more volatile, but also make them cheaper on average, which would further affect the profitability of coal-fired power plants. ..
The Liddell power plant in Hunter, New South Wales is already scheduled to close in 2023, but the report says it could be closed at least once more in the state by 2025.
Eraring, Vales Point, Mount Piper, and Yallourn, Victoria, New South Wales are listed as the most vulnerable.
“What we really have to do is plan to replace these coal-fired power plants with ones that balance wind and solar and are very flexible. That’s the problem with coal. That’s why, “said Edith.
He said pumped storage and large-scale battery storage are likely to be more competitive and environmentally friendly solutions in the long run, while gas can play a role in the short term. ..
“One obvious thing is that supporting coal is probably not practical, and building a new coal-fired power plant is certainly a very stupid idea,” he said.
Early closure expected
This report reflects recent comments by Dr. Kelly Schott, Independent Chair of the Energy Security Commission. Dr. Kelly Schott is working on a major reform of the national electricity market to address energy conversion.
She said last week that renewables are making coal increasingly unprofitable and warned that coal-fired power plants could be shut down four to five years earlier than expected.
In that scenario, all four coal-fired power plants in the NSW Hunter region will disappear by 2030.
“What Kelly Shot is doing is saying we need to overcome this and manage it,” said Tony Wood, Energy Director at the Grattan Institute.
Mr Wood said the analysis of the IEEFA / Green Energy Market Report was “a positive objective” but “not at all unbelievable”.
He said uncertainty in the energy sector was a serious problem, partly due to conflicts in government policy to support both renewables and traditional generators.
“The faster we gain credibility and predictability for our energy and climate policies, the sooner we will see a decline in what could be a nasty problem,” he said.
Last week, Origin Energy CEO Frank Calabria revealed that the country’s largest coal-fired power plant in Eraring, New South Wales, is already suffering from low wholesale prices, flagging the plant to close early. I did.
“It’s no exaggeration to say that wholesale prices are unsustainable and there is a reaction to supply. It’s just planned or unplanned. And that’s what the market is like today. “He said, announcing Origin’s interim results.
“I think it’s going to be a pretty tough time in reality. I think Eraring will run less of our generation. That’s what you’re seeing right now.”
Origin, AGL, Neoen and CEP Energy are all planning large battery projects for the future.
The Australian Energy Council, which represents coal, gas, hydro and renewable energy generators, said the wholesale energy market is seeing “significant changes” as more renewable energy is introduced into the system. ..
“It puts more pressure on coal-fired generators in particular,” said AEC CEO Sarah McNamara.
“The key issues are ensuring the orderly withdrawal of old thermal power plants, and investing in dispatchable power generation, and the appropriate overall of resources and system services to maintain the security and reliability of the system. To promote the combination. “
She said these challenges were flagged by the Energy Security Commission, which is essential to align the grid and support timely and efficient investment.
“If the government imposes policies outside of domestic market arrangements, their work will be more difficult, which can exacerbate the problems identified in this report,” she said.
‘Tidal wave’ of renewables could force early coal closures Source link ‘Tidal wave’ of renewables could force early coal closures